What is a Music Distribution Contract?

A music distribution contract is a legal agreement where the owner of a master recording, typically an independent artist or record label, grants permission to another individual or company to distribute, sell, and commercially exploit the master. This contract can encompass both digital and physical distribution, each with its own specific details. The primary goal is to ensure that the music reaches the necessary platforms and stores to maximize the commercial potential of the master.

How Does a Music Distribution Contract Work?

Consider the scenario where Alex, an independent artist, wants to upload his music to Spotify. He discovers a digital distribution company called DistriBute, reviews their terms of service, including a one-year duration, the royalty rate DistriBute charges as a commission for its services, and the timeline for making his music available on Spotify.

Alex agrees and uploads his first single to DistriBute in digital format, along with necessary distribution information such as the song's name, cover art, release date, and composition and production credits. DistriBute is responsible for sending Alex's music to Spotify and other agreed-upon digital platforms.

Whenever a Spotify user plays Alex's music, DistriBute tracks the play, collects payments from Spotify, deducts its commission, and sends the remaining payment to Adrián. The contract continues for the agreed period of one year, after which Alex can decide whether to renew the contract or find another digital distributor.

The primary responsibility of DistriBute is to ensure Alex's music is uploaded to the agreed digital platforms, and Alex receives a royalty rate for every play of his music on these platforms.

What Information Is Typically Included in a Music Distribution Contract?

Here are the key elements typically included in a digital music distribution contract:

1. Identification of Parties: Lists the full names and contact details of the music provider and the distributor.
2. Distribution License: Details the license granted by the music provider to the distributor to distribute the music.
3. Services: Describes the distributor's commitment to distribute master recordings on various digital platforms such as Spotify, Pandora, Apple Music, online stores like iTunes, and social media platforms like Instagram and TikTok.
4. Recordings: Specifies the conditions for delivering master recordings and confirms the artist or label's ownership and copyright registration rights.
5. Territory: Defines the geographical area where the distributor is authorized to distribute the music.
6. Duration or Term: Specifies the duration for which the distributor has rights to distribute the music.
7. Exclusivity: The music provider designates the distributor as the exclusive representative for the promotion and monetization of their music across specified distribution channels.
8. Functions and Obligations: Outlines the distributor’s right to sub-license distribution rights, manage digital rights, and upload content to various channels. It also includes their obligations to promote the music and enhance distribution services.
9. Commissions and Payments: Details the commission rates the distributor will charge, including payment schedules and methods. Explains different commission structures such as percentage-based royalties or flat annual fees, along with additional charges for supplementary services like marketing and publishing administration.
10. Intellectual Property: Ensures that the music provider possesses the necessary rights to distribute the music.
11. Use of Name: Grants the distributor the right to use the artist's name, likeness, and other biographical materials for marketing and commercializing the recordings.
12. Obligations of the Parties: Specifies the responsibilities of each party, including the provision and promotion of the music.
13. Conflict Resolution: Establishes methods for resolving disputes related to the contract.
14. Confidentiality: Sets terms to safeguard the confidential information of both parties involved.

Is a Lawyer Necessary to Create a Music Distribution Contract?

As a general rule, a lawyer is not necessary to create a music distribution contract. However, there are cases where it is advisable to have a lawyer with experience in the music and entertainment industry.

Most people don't have thousands of dollars to pay for a legal retainer. That is why we created Flou, so you can draft, sign, send and track your contracts, all in one place and in a matter of seconds. Click here to try for free, today.